Many veterans have been planning their military retirement for almost as long as they have served in the military. As our soaring US deficits cause more and more program cuts, a Pentagon-sponsored study says military pensions are becoming unaffordable.

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Modernizing Military Retirement

Many veterans have been planning their military retirement for almost as long as they have served in the military.

The military retirement system has been an earned privilege for those who have faithfully served our country. And, along with Social Security and Medicare, it seemed almost an inalienable right.

But as our soaring US deficits cause more and more program cuts, a Pentagon-sponsored study says military pensions are becoming unaffordable.

OVERHAUL OF MILITARY RETIREMENT?

In high-level meetings starting July 2011 at the Pentagon, from a panel comprised of influential military advisors and called the Defense Business Board, a radical proposal to overhaul retirement for the nation's 1.4 million service members is being explored.

Their plan, laid out in a 24-page presentation "Modernizing the Military Retirement System," would eliminate the familiar system under which anyone who serves 20 years is eligible for retirement at half their salary. Instead, they propose a 401k-style plan with government contributions.

In addition, veterans may need to wait until normal retirement age. This new plan is said to save $250 billion dollars over 20 years.

The Pentagon's stated goals are to review all areas of the defense budget, and to "inform the decisions and strategies that we have to make," said Defense Secretary Leon E. Panetta. "... and in what areas we look to for savings."

The Defense Business Board provides DOD's senior leaders independent advice and recommendations "on effective strategies for the implementation of best business practices on matters of interest to the Department of Defense," according to Pentagon officials.

Navy Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, said any changes to military retirement should be studied carefully and should be "grandfathered" so the military keeps its word to all those already in the service.

"Any recommendation to change the military retirement system must be approached with thoughtful analysis, to include considerations of impacts to recruiting and retention," Eileen Lainez said. The military retirement system, as with all other compensation, is subject to review for effectiveness and efficiency.

Advocates say a new Military Retirement System could not only save money, it could also be more fair by giving some benefits to those who serve less than 20 years, as well as giving more money to those who serve in combat or high risk situations.

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